The chase for growth in western China could cause “huge surge in pollution”

If industrial growth in western China follows the same path as the east then environmental damage could be even more severe, warns Ma Zhong.

Ma Zhong is dean of Renmin University’s School of Environment and Natural Resources.

chinadialogue: For years the official story on China’s environment has been that it is “worsening overall, but improving in places”. Is that still the case today?

Ma Zhong : China’s environment is continuing to worsen. And the environmental problems are closely linked to economic development. If you want to look at when that started, I think you need to go back to the 9th Five-Year Plan [1996-2000] or even earlier.

In the three decades since “reform and opening up” [the programme of reforms which liberalised China’s economy] China has seen average GDP growth of 10% each year. It’s rare for a country to keep up that sort of speed for so long.

Over that 30-year period, the Chinese economy has been rocked by external factors twice. During the Asian financial crisis at the end of the 20th century, growth dropped to 7% – half the peak of 15%. And GDP growth slumped again during the global financial crisis of 2008, which prompted China to set a goal of maintaining 8% GDP growth.

On both occasions we saw very important changes in environmental protection.

The Asian financial crisis hit during the later stages of the 9th Five-Year Plan. The economic slump led to low demand and left factories lying idle. Economic growth targets were missed – but we overachieved on environmental goals.

In the 9th Five-Year Plan China started setting national caps on emissions of 12 major pollutants. These included sulphur dioxide and chemical oxygen demand [a measure of water pollution], both of which were also marked out for cuts during the 11th Five-Year Plan, from 2006 to 2011.

With industrial expansion in full swing, cutting sulphur dioxide would have been very difficult, so the cap in the 9th five-Year Plan still allowed for growth in emissions of this pollutant. However the Asian financial crisis resulted in an unexpected drop in domestic demand: electricity use fell and power plants turned off their generators, while planned construction of new power plants was put on hold. And by the year 2000, sulphur-dioxide emissions were 4.5 million tonnes under target – an unexpected bonus for environmental controls.

But when the economy picked up, emissions rebounded. During the 10th Five-Year Plan [2001-2005] the economy, energy consumption and industrial investment all grew, and by the end of the period not a single emissions target had been reached.

So when it came to the next five-year plan, the 11th, hard decisions were made – 10% emissions cuts became mandatory. This was the first time environmental targets had been written into social and economic development plans. Funds were allocated and measures taken. Within those five years, the proportion of waste-water being treated jumped from less than 30% to over 70%, while the amount of sulphur being scrubbed from power station chimneys reached an unprecedented 80%.

This was also the period when the global financial crisis hit, causing China’s GDP growth rate to slip to about 8%. The 11th Five-Year Plan’s environmental targets were reached with relative ease.

These three five-year periods demonstrate the relationship between China’s economic growth and its environmental aims. You could say recession is the best way of reducing emissions.

cd: Is there a way for China to maintain economic growth and also meet environmental goals?

MZ: That will be very difficult while industrialisation and urbanisation are still happening and regional disparities have not been addressed. Whatever methods you use to cut emissions, the root problems are at the sources of pollution – in industry.

In the last decade, China’s services sector has grown rapidly, but it is still much smaller than the industrial sector, and the gap is actually increasing. The service sector’s expansion is related to the shrinking importance of agriculture, while the proportion of the economy accounted for by industry continues to grow. 

China has been talking about restructuring its economy for 15 years. But the facts show this still hasn’t happened, and in the short-term there is little chance that industry will fall out of its leading position.

cd: How can China tackle the conflict between economic growth and the environment?

MZ: One factor worth stressing is regional disparities.

Western China is geographically expansive, has low levels of urbanisation, and is economically weak – but it is currently chasing economic growth. Since 2007, GDP in western China has been growing at a faster rate than in the east. And since 2005, investment in fixed assets in central and western China has been greater than in the east too. Central and western China have rich resources and, as soon as there is market demand, industrial growth in these places will be extremely rapid. But there is little ability to deal with pollution, and environmental damage here could be even more severe than on the east coast .

Pollution in eastern China has little effect on the country’s interior. But the west is where China’s major rivers rise, while atmospheric circulation runs from west to east. So the pollution and emissions of the west will move east with the air and water. That’s a national problem, not a regional one. Currently western China accounts for less than 20% of the country’s economy, but it already produces more than 30% of all pollutants. The west is a much more intensive polluter than the rest of China on average. If it develops as the east has done, economic growth will be followed by a huge surge in pollution.

When it comes to today’s 12th Five-Year Plan, targets for reduction of four major pollutants differ significantly across provinces. Emissions targets in the west of China are much less ambitious than the national average. That takes into account the west’s economic capacities, but it may be misjudged. The east has already made large reductions in emissions, and further emission will come at increased cost. And the impact of weaker emissions reduction in the west will affect eastern China and, indeed, the whole country.

The result will be that the east will lose out financially, while the west will lose out environmentally.

Differentiated responsibilities should be applied, like in global efforts to cut carbon emissions. Emissions cuts in the west, which is in an early stage of development – meaning potential for large and cheap emissions cuts – should be prioritised. As well as making economic sense, this would bring greater environmental benefits, as pollution in the west of China has national impacts.

Funding for emissions cuts should give preference to the west, and trading mechanisms between the two regions could be established. For example, the east could transfer emissions cuts funding to the west in order to achieve its own emissions reduction targets, benefiting both.

The opportunities afforded by these regional disparities could provide a greener development path for China.